†iwR÷vW© bs wW G-1

evsjv‡`k †M‡RU
AwZwi³ msL¨v
KZ…©cÿ KZ…©K cÖKvwkZ

†mvgevi, Ryb 22, 2015

[ †emiKvwi e¨w³ Ges K‡c©v‡ikb KZ©„K A‡_©i wewbg‡q RvixK…Z weÁvcb I †bvwUkmg~n ]
BANGLADESH SECURITIES AND EXCHANGE COMMISSION
NOTIFICATION
June 22, 2015
No. BSEC/CMRRCD/2015-343/171/Admin/59In exercise of the power
conferred by section 24(1) of the evsjv‡`k wmwKDwiwUR A¨vÛ G·‡PÄ Kwgkb AvBb,
1993 (1993 m‡bi 15 bs AvBb) read with section 33 of the Securities and
Exchange Ordinance, 1969 (Ordinance No. XVII of 1969) and in pursuance
of section 32 of the said Ordinance, the Bangladesh Securities and
Exchange Commission hereby makes, after prior publication, the following
Rules, namely :

CHAPTER I
PRELIMINARY

1. Short title and commencement.

(1) These Rules may be called the “Bangladesh Securities and
Exchange Commission (Alternative Investment) Rules, 2015”.
(2) These Rules shall be applicable for the registration and
regulation of alternative investment funds, fund managers and
Trustees of such funds and for matters connected therewith
and incidental thereto.
(3) These Rules shall come into force on the date of publication in
the official Gazette.
( 4613 )
g~j¨ t UvKv 40.00
4614 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015
2. Definitions.
(1) In these Rules, unless there is anything repugnant in the context or
subject

(1) “Act” means the evsjv‡`k wmwKDwiwUR A¨vÛ G·‡PÄ Kwgkb AvBb, 1993
(1993 m‡bi 15 bs AvBb);
(2) “alternative investment fund” or “fund” means any fund
established or constituted in Bangladesh in the form of a trust
which,
i. is a “private equity fund” or a “venture capital fund” or an
“impact fund” or any other type of fund as declared by the
Commission as alternative investment fund from time to
time;
ii. is a privately pooled investment vehicle which collects
funds from eligible investors for investing in accordance
with a defined investment policy for the benefit of its
investors;
iii. is a closed end fund with specific tenure;
iv. collect subscription by way of private placement only and
does not offer its units for public subscription; and
v. is not covered under the wmwKDwiwUR A¨vÛ G·‡PÄ Kwgkb (wgDPz¨qvj
dvÛ) wewagvjv, 2001, or any other Rules of the Commission to
regulate fund formation and management activities;
(3) “asset manager” means a ‘m¤ú` e¨e¯’vcK'Õ as defined in the
wmwKDwiwUR I G·‡PÄ Kwgkb (wgDPz¨qvj dvÛ) wewagvjv, 2001;
(4) “buyout” means such investment of an alternative investment
fund by which the ownership equity of a company, or majority
of outstanding equity shares of the company is acquired by the
fund;
(5) “capital call” means the demand made by a fund manager for
payment of all or part of the remaining amount of the
subscription committed by the investors of a fund;

(6) “Commission” means the Bangladesh Securities and Exchange

Commission established under section 3 of the evsjv‡`k
wmwKDwiwUR A¨vÛ G·‡PÄ Kwgkb AvBb, 1993 (1993 m‡bi 15 bs AvBb);
(7) “committed fund” means the total amount of commitments
received from the investors to invest in the fund when being
called-up;
 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015 4615
(8) “connected person” means in relation to a natural person,
spouse or any person dependant on such person, a partner of
an undertaking of which such person is also a partner,
company or body corporate in which such person is a
substantial shareholder or director; and in relation to a legal
person, an undertaking, company or body corporate which is a
holding, subsidiary or associate company of such legal person;

(9) “constitutive documents” means the principal documents and

agreements governing the formation of a fund including the
trust deed, placement memorandum, subscription agreement,
investment management agreement and all other related
material documents;
(10) “corpus” or “fund corpus” means the total amount realized from
and committed by the investors to an alternative investment
fund as on a particular date;
(11) “depository” means any depository established under the
wWcwRUwi AvBb, 1999 (1999 m‡bi 6 bs AvBb);
(12) “eligible investors” or “investors” means participants eligible
and competent to understand the risk & return potentials to
invest and commit capital to any alternative investment fund
and be either a registered local of foreign fund manager or a
company incorporated in Bangladesh or abroad or a statutory
body or a local government authority or a bank or a financial
institution or an insurance company or a merchant banker or a
stock dealer or an asset manager or an alternative investment
fund managed by another fund manager or a registered
pension fund or a registered provident fund or a registered
trust fund or a registered super annuation fund or a foreign
fund or a foreign individual or a high net worth resident or
non-resident Bangladeshi individual;
(13) “equity linked instruments” means quasi-equities like fully or
partly convertible or redeemable preference shares and debt
securities with convertible features;
(14) “foreign fund” means a fund established and registered outside
Bangladesh and engaged in the business of an alternative
investment fund by whatever name called;
(15) “fund manager” or “fund management company” means any
person who is entrusted to operate, manage and advice an
alternative investment fund;
4616 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015
(16) “high net worth individual” or “HNI” means a natural person
having minimum net worth of taka 20 (twenty) million certified
by the concerned tax authority;
(17) “hurdle rate” means a reference annual rate of return on
investment of a fund as disclosed in the constitutive documents;

(18) “impact fund” means an alternative investment fund which

invests in equity and equity linked instruments of such
companies, organizations, and funds which are engaged in
activities with the intention to generate a measurable and
beneficial social or environmental impact in addition to
financial returns, as justified with internationally recognized
criteria;

(19) “investible fund” means realized fund at a given time net of

estimated administrative and management expenses for of the
fund;

(20) “investment management agreement” or “IMA” means an

agreement between fund manager and Trustee depicting details
procedure of management of an alternative investment fund;

(21) “investment committee” means a committee to approve

investments of the fund comprising 03 (three) to 05 (five)
members;
(22) “Islamic fund” means a fund which invests in Shariah compliant
securities/companies/instruments, in response to the needs of
investors who want to make Shariah compatible investments;

(23) “NAV per unit” means NAV of a fund divided by total number of
units outstanding at a given time;

(24) “net asset value” or “NAV” means total assets of a fund

excluding total liabilities at a given time;

(25) “Ordinance” means the Securities and Exchange Ordinance,

1969 (Ordinance No. XVII of 1969);

(26) “person” means any company, partnership business or firm or

any club or association of more than one persons whether
incorporated or not, as well as a natural person;

(27) “placement memorandum” means a document, containing

information and disclosures specified in Schedule ‘C’ of these
Rules, inviting eligible investors to invest in units of the fund;
 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015 4617
(28) “portfolio company” or “investee” means any company or any
other fund in which an alternative investment fund makes an
investment ;

(29) “private equity fund” means an alternative investment fund

which invests primarily in equity and equity linked instruments
of potentially high growth non-listed portfolio companies with
minimum 02 (two) years’ operational history or to conduct
buyouts of companies according to the stated objectives of the
fund;

(30) “private placement” means offer of units to the eligible

investors in a way other than public offering;

(31) “realized fund” means the total amount of fund paid-up by the
unit holders out of the fund corpus;

(32) “register” means the register recording the details information

of the units and unit holders of the fund;

(33) “securities” means securities as defined in sub-section (l) of

section 2 of the Securities and Exchange Ordinance, 1969
(Ordinance No. XVII of 1969) and units of any alternative
investment fund;

(34) “Schedule” means the Schedule annexed to these Rules;

(35) “Shariah council” means a council which certifies the Islamic

financial products and companies as being Shariah-compliant.
A Shariah council performs the following responsibilities :

a) prepares guidelines and methodologies for selecting/

screening of companies/securities/instruments to be
acceptable as per Shariah principles;
b) recommends companies/securities/instruments for
investment, consistent with the guidelines and
methodologies;
c) certifies/approves the criteria of identifying prohibited
incomes and recommending distribution of those income
to any charitable organization;

d) certifies at the end of each accounting year that all

investments and incomes accounted for are Shariah
compliant;
4618 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015
(36) “sponsor” means one or more eligible investors subscribing
initially, jointly or solely, to form a fund;

(37) “subscription agreement” means an agreement, between the

fund manager and the eligible investors for subscribing to the
fund;

(38) “trust” means a trust established under the Trust Act, 1882 (Act
No. II of 1882) for the purpose to constitute an alternative
investment fund;

(39) “Trustee” means a Trustee, appointed and registered in respect

of any fund established under these Rules;

(40) “trust deed” means the deed executed between the sponsor(s)
and the Trustee in respect to the fund;

(41) “unit” means beneficial interest of the investors in the

alternative investment fund;

(42) “unit holder” means one or more eligible investors including

the sponsors who is the legal owner of one or more units of the
fund and whose name appears in the register;

(43) “venture capital fund” means an alternative investment fund

which invests primarily in non-listed equity and equity linked
securities of start-ups with less than 02 (two) years’ operational
history or green field companies or emerging early-stage
undertakings mainly involved in new products, services,
technologies or intellectual property rights based activities or
new business models.

(2) Unless otherwise repugnant for any purpose, words and expressions
used herein and not defined, but defined in the Trust Act, 1882 (Act
No. II of 1882), the Registration Act, 1908 (Act No. XVI of 1908), the
Securities and Exchange Ordinance, 1969 (Ordinance No. XVII of
1969), e¨vsK-†Kv¤úvbx AvBb, 1991 (1991 m‡bi 14 bs AvBb), evsjv‡`k
wmwKDwiwUR A¨vÛ G·‡PÄ Kwgkb AvBb, 1993 (1993 m‡bi 15 bs AvBb), Avw_©K
cÖwZôvb AvBb, 1993 (1993 m‡bi 27 bs AvBb), ‡Kv¤úvbx AvBb, 1994 (1994
m‡bi 18 bs AvBb), wWcwRUwi AvBb, 1999 (1999 m‡bi 6 bs AvBb), exgv AvBb,
2010 (2010 m‡bi 13 bs AvBb) and Rules and Regulations made under
the above Acts and Ordinances shall have the same meanings
respectively assigned to them in the said Acts and Ordinances.
 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015 4619
CHAPTER II
FUND MANAGER

3. Registration of a fund manager.

(1) A fund management company shall be registered by the
Commission under these Rules and no person shall act as the
fund manager to any alternative investment fund without
such registration :

provided that, an existing fund management company, which

is not registered with the Commission, shall submit
application for registration under these Rules within 01(one)
year from commencement of these Rules fulfilling the
requirements, and may continue to operate till disposal of
such application :

further provided that, if a foreign entity or foreign fund

management company intends to act as fund manager in
Bangladesh, it shall form a fund management company
incorporated in Bangladesh and such company shall
thereafter get registration under these Rules.

(2) A fund management company shall apply for registration to the

Commission as per Schedule ‘A’ along with required information
and documents and application fee of Tk. 50,000.00 (taka fifty
thousand) only through a bank draft or payment order issued in
favour of the Bangladesh Securities and Exchange Commission.

(3) The applicant shall have the following eligibility criteria to

apply for registration, namely :
(a) be a company or statutory body;
(b) it is stated in its memorandum of association that its
object is to provide alternative investment fund
management services;
(c) has a paid up capital of at least taka 50 (fifty) million :

provided that, if an asset manager intends to get

registration as a fund manager under these Rules, it shall
have a paid up capital of taka 50 (fifty) million in addition
to its paid-up capital requirements to operate as an asset
manager and distinctively separate team with required
expertise and capacity to carry out fund management
activities :
4620 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015
further provided that, if a foreign entity or foreign fund
management company applies for registration of a fund
manager under these Rules through a wholly owned
subsidiary company, the applicant shall have a paid up
capital of at least taka 150 (one hundred fifty) million :
further provided that, if a foreign entity or foreign fund
management company applies for registration of a fund
manager under these Rules through a partially owned
subsidiary company, the applicant shall have a paid up
capital of at least taka 100 (one hundred) million;
(d) has minimum net worth of 75% (seventy five percent) of
its total paid up capital:
provided that if the net-worth of a fund manager, at any
time, goes down below 75% (seventy five percent) of its
total paid-up capital, it shall increase it up to the required
level within the next accounting year;

(e) maintains adequate financial, technical, infrastructural

and organizational facilities and human resources, and
employ appropriate systems, procedures, technologies,
processes and personnel to discharge alternative
investment fund management services in a proper and
efficient manner on an ongoing basis;

(f) prepares its financial statements as per International

Accounting Standards (IAS) and International Financial
Reporting System (IFRS) as applicable in Bangladesh, and
audited as per Bangladesh Standards of Auditing (BSA);

(g) appoints a Chief Executive Officer (CEO) and/or a Chief

Investment Officer (CIO) and a compliance officer each
having a relevant academic background and at least 07
(seven) years relevant professional experience;

(h) neither the applicant, nor any of its directors is a loan

defaulter;

(i) neither the fund management company, nor any of its

affiliates or directors has any relation with a Trustee to
any alternative investment fund or mutual fund;
 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015 4621
(j) has no track record of default, negligence or non-
compliance with any of the securities laws for
discharging its duties, if it is in any way connected with
the securities market;
(k) maintains satisfactory internal controls and written
compliance and risk management procedures addressing
all applicable regulatory requirements.

(4) On receipt of the application under rule 3(2), the Commission

shall examine it, and if it is satisfied that all the requirements
of these Rules are fulfilled, the Commission may accord
registration as per Schedule ‘F’ to the fund manager, as sought
for, within 30 (thirty) days of receipt of the application.

(5) If the Commission finds that the applicant does not fulfil all the
requirements of these Rules or any additional submission is
required, it may, within 25 (twenty five) days of receipt of the
application, direct the applicant to fulfil the requirements
within such time as the Commission may determine, and the
Commission may accord registration as prayed for within 30
(thirty) days of such fulfilment.

(6) If the Commission finds that the applicant does not fulfil all the
requirements of these Rules, or where a direction to fulfil
certain requirements was given under rule 3(5) and the
applicant fails to fulfil such requirements, the Commission may
reject the application, stating the reasons thereof.

(7) If the Commission decides to award registration to the

applicant, it shall pay, within fifteen days of such decision,
registration fee of Tk. 100,000.00 (taka one hundred thousand)
only through a bank draft or payment order issued in favour of
the Bangladesh Securities and Exchange Commission.

4. Annual Fee.
(1) The fund manager registered under these Rules shall pay an
annual fee of Tk. 50,000.00 (taka fifty thousand) only to the
Commission through a bank draft or payment order issued in
favour of the Bangladesh Securities and Exchange Commission
within 1(one) month of end of each financial year.
(2) If any fund manager fails to pay the annual fee within the stipulated
time, it shall be liable to pay a penalty of Tk. 25,000.00 (taka
twenty five thousand) for each month of default or part thereof.
4622 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015
5. Transfer of management of the funds and surrender of license of a fund
manager.

(1) The fund manager or the Trustee or the unit holders, if think
necessary to do so, may transfer the management of a fund to
another licensed fund manager, subject to approval of at least
2
/3rd (two-third) majority of the unit holders by value of their
investment in the fund in a general meeting, and thereafter
approval of the Commission;
(2) A fund manager shall apply to the Commission for cancellation
of its registration, if it transfers the management of all the
funds managed by it to other fund manager(s), within 06(six)
months of the last transfer.

6. Duties and responsibilities of a fund manager.A fund manager shall :

(1) manage the fund in accordance with the constitutive
documents and all applicable laws including notifications,
circulars, guidelines and directives issued under those in the
interest of unit holders, without gaining any undue
advantage for itself or any of its connected persons;

(2) ensure that in case of a capital call, the investors are given at
least two weeks time in writing to make the payments
against such calls;

(3) carry out all transactions involving the fund on an arm’s

length basis;
(4) ensure that the fund manager, its directors and employees
and members of the investment committee do not have any
material interest in any portfolio company;

(5) ensure collection of KYC and other documents from the

eligible investors;
(6) collect undertakings from the investors to the effect that
they have understood the constitutive documents and fully
aware of the risk & return potentials of the investment in the
fund;
(7) prepare an ‘investment and fund management guidelines’
with approval of the Trustee and ensure strict compliance of
the said guidelines;
(8) prepare code of conduct for its directors and employees to
mitigate conflict of interests;
 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015 4623
(9) ensure that the investments made are properly identified
and held for the benefit of the unit holders in accordance
with the provisions of the constitutive documents, these
Rules and all other applicable laws;
(10) ensure that all investments are made as per the investment
guidelines and approved by the investment committee and
the Trustee before disbursement;
(11) closely monitor the activities of portfolio companies and if
necessary, participate in the management and represent in
the board of directors of such companies with approval of
the Trustee;
(12) not delegate its fund management functions to any other
person:
(13) maintain at its registered office, proper books and records
of account and activities undertaken in connection with the
fund in order to enable forming a true and fair view of the:
(a) assets and liabilities of the fund;
(b) profits and losses accruing out of the operation of the fund;
(c) transactions undertaken with respect to the fund;
(d) amounts received in respect of issue of units;
(e) analysis of portfolio companies;
(f) investments made out of the investible fund; and
(g) pay-outs, if any, by way of distributions to the unit holders ;
(14) maintain books and following records of the fund till five
years after winding up of the fund:
(a) the assets under the fund;
(b) valuation policies and practices;
(c) investment strategies;
(d) particulars of investors and their contribution;
(e) rationale for the investments made;
(f) settlement of the fund and payment made to the unit
holders ; and
(g) all constitutive documents of the fund.
(15) within 90 (ninety) days of closing of the accounting year of
the fund, prepare financial statements of each fund as per
International Accounting Standards (IAS) and International
Financial Reporting Standards (IFRS) as applicable in
Bangladesh and get those audited as per Bangladesh
Standards of Auditing (BSA).
4624 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015
(16) within 15 (fifteen) days of completion of the audit, hold
annual general meeting of the unit holders and within 07
(seven) days of the AGM, transmit the following documents
certified by the Trustee to the unit holders and the
Commission:
(a) annual report;
(b) balance sheet stating details of investments depicting
cost and realizable value of such investments;
(c) income statement;
(d) cash flow statement;
(e) auditors’ report to the unit holders on the accounts
including comments on the investments made by the
fund; and
(f) statement of movement in NAV per unit of the fund.
(17) also provide with the annual report, a report to the investors
including the following information, as may be applicable to
the fund :
(a) financial information of the portfolio companies;
(b) investments made to each portfolio company/securities
and return on such investments;
(c) material risks and how they are managed which shall
include, among others:
i. concentration risk at fund level;
ii. foreign exchange risk at fund level;
iii. leverage risk at portfolio company levels;
iv. realization risk (i.e. change in exit environment)
at fund and portfolio company levels;
v. strategy risk (i.e. change in or divergence from
business strategy) at portfolio company level;
vi. reputation risk at portfolio company level; and
vii. extra-financial risks, including environmental,
social and corporate governance risks, at fund
and portfolio company level.
(18) transmit half yearly unaudited financial statements and
report of the fund to the unit holders , the Trustee and the
Commission in electronic form;
 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015 4625
(19) invest and manage the investible funds in accordance with
the investment and fund management guidelines and
objectives depicted in the constitutive documents;

(20) ensure that no material change in the investment policy or

objectives of the fund is made without the approval of the
unit holders through a special resolution and the Trustee;
(21) undertake valuation of investments of the fund as per the
valuation methodology, at least semi-annually, by an
independent valuer appointed by the Trustee, other than
statutory auditors of the fund, fund manager and the
Trustee;

(22) disseminate NAV per unit of the fund semi-annually to the

unit holders, the Trustee and the Commission;

(23) ensure that the valuation methodology of the fund is

prepared in accordance with the International Private
Equity and Venture Capital Valuation Guidelines as updated
from time to time, approved by the Trustee and published in
the constitutive documents and annual reports of the fund;

(24) immediately inform the Commission of any special

resolution passed by the unit holders ;
(25) ensure that after the extinguishment of the trust, the fund is
dissolved and the proceeds are distributed amongst the unit
holders ;
(26) provide copies of the constitutive documents to the eligible
investors;

(27) immediately inform the Commission in writing if any

information or particulars previously submitted to the
Commission are later found to be false or misleading in any
material particular or if there is any change in the
information already submitted;

(28) review policies and procedures, and their implementation,

on a regular basis, or as a result of business developments, to
ensure their continued appropriateness;

(29) act responsibly in a fiduciary capacity towards the investors

and shall disclose to the investors, all conflicts of interests as
and when they arise or seem likely to arise;
4626 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015
(30) establish and implement written policies and procedures to
identify, monitor and appropriately mitigate conflicts of
interest throughout the scope of business;

(31) maintain high level principles on avoidance of conflicts of

interest with connected persons;

(32) ensure transparency and disclosure of information to

investors, among others, on the following:

(a) financial, risk management, operational, portfolio, and

transactional information regarding fund investments;
(b) any fees ascribed to the fund manager or Trustee; and
any expenses charged to the fund;
(c) any inquiries/legal actions by legal or regulatory bodies
of any jurisdiction, as and when occurred;
(d) any material liability arising during the fund’s tenure, as
and when occurred;
(e) any breach of provision of the placement memorandum
or agreements or any other constitutive documents, as
and when occurred; and
(f) change in control of the Trustee, sponsors, fund manager
and portfolio companies.
(33) ensure that any loss or expense resulted from negligence of
the fund manager, its officers or appointed persons is not
charged to the fund;
(34) address all investor complains;
(35) provide any information sought by the Commission;
(36) maintain all records as may be specified by the Commission;
(37) take all reasonable steps to address all sorts of conflict of
interests;
(38) ensure transparency and disclosures as specified in these
Rules and the constitutive documents; and
(39) lay down procedure for settlement of disputes between the
investors, fund, fund manager, Trustee or sponsor through
arbitration or any such other mechanism as mutually
decided between the investors, the Trustee and the fund
manager.
 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015 4627
7. Fund management fee.

(1) The fund manager shall be entitled to an annual fund

management fee up to 4% (four percent) of NAV of the fund for
managing an impact fund, up to 3% (three percent) of NAV of the
fund for managing a venture capital fund and up to 2% (two
percent) of NAV of the fund for managing a private equity fund.

(2) The fund manager may share up to 20% of the net annual profit
of a fund, if the fund can achieve the hurdle rate as per terms
and conditions disclosed in the Constitutive document.

CHAPTER III
ALTERNATIVE INVESTMENT FUNDS

8. Formation and Types of Funds.

(1) An alternative investment fund shall be constituted in the form of
a trust under the Trust Act, 1882 (Act No. II of 1882) and registered
under the Registration Act, 1908 (Act No. XVI of 1908).
(2) Before registration of the trust, the draft trust deed shall be
approved by the Commission.
(3) A fund shall be formed to make a particular type of investment
and operate entirely in its respective investment arena only.
(4) A fund may be operated as a general fund or an Islamic fund.
(5) An alternative investment fund shall have the following
criteria:
(a) minimum fund corpus shall be at least Tk.10,00,00,000.00
(taka one hundred million) and subscription by the
sponsor(s) is not less than 10% (ten percent) of the corpus:
provided that, the sponsors shall subscribe at least 20% of its
total subscription to the fund before registration of the
fund;
(b) minimum investment by the fund manager shall be at
least 2% (two percent) of the fund corpus:
provided that, if the fund manager also acts as sponsor
of a fund, this investment shall be made in addition to its
investment as sponsor of the fund;

(c) along with its connected persons, the fund manager shall
not hold more than 25% (twenty five percent) of the units
of a fund at any point of time.
4628 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015
(6) The sponsor(s) shall maintain a continuous investment of not
less than 2.5% (two and half percent) of the fund corpus.
(7) An alternative investment fund shall declare, to the unit
holders, cash dividends only.
(8) All investments in a fund shall be locked in for a period of
03 (three) years from the date of issuance of units.
(9) The fund manager and sponsors shall disclose their investment
in the alternative investment fund to the Trustee when the
investment is made and to the investors through annual
reports.
9. Registration of alternative investment funds.-
(1) On and from the commencement of these Rules, no alternative
investment fund shall be formed or operate unless it has
obtained registration from the Commission:
provided that a fund already in operation on the date of
commencement of these Rules and falling within the definition
of alternative investment fund which is not registered with the
Commission, may continue to operate, without having
registration under these Rules, to complete its agreed tenure but
shall not raise any fresh money other than realization of
commitments already received and shall be liable to adhere to
all other requirements of these Rules and notifications/orders
made there under including submission of information and
reports on its activities to the Commission:
further provided that, if a foreign fund intends to operate as an
alternative investment fund in Bangladesh, it shall get registration
or invest through a fund registered under these Rules.
(2) The fund manager and Trustee shall jointly apply for
registration of the fund to the Commission as per Schedule ‘B’
along with a draft placement memorandum, other required
information and documents, and an application fee of Tk.
50,000.00 (taka fifty thousand) only through a bank draft or
payment order issued in favour of the Bangladesh Securities
and Exchange Commission.
(3) The fund shall have the following eligibility criteria for
registration, namely :
(a) the fund is formed as a trust;
(b) the trust deed permits it to carry on the activities of an
alternative investment fund;
 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015 4629
(c) the fund is prohibited by the trust deed from making an
invitation to the public to subscribe to its units;
(d) the trust deed is prepared in accordance with Schedule ‘D’;
(e) the key investment team of the fund manager have adequate
experience, with at least one key personnel having not less than
five years experience in advising or managing pools of capital or
fund or asset or wealth or portfolio management or in the
business of buying, selling and dealing of securities or other
financial assets and has relevant professional qualification;
(f) the fund manager and the Trustee are registered by the
Commission under these Rules;
(g) the fund manager has necessary infrastructure and
manpower to effectively discharge its duties;
(h) the investment objective, the target investors, proposed
corpus, investment style or strategy and proposed tenure of
the fund are clearly described in the application; and
(i) the sole object of the fund is to carry out activities in
furtherance of the interest of the unit holders, in accordance
with the strategy stated in the constitutive documents.
(4) On receipt of the application under rule 9(2), the Commission
shall examine it, and if it is satisfied that all the requirements of
these Rules are fulfilled, may accord registration to the fund and
issue a registration certificate as per Schedule ‘F’, as sought for,
within 30 (thirty) days of receipt of the application.
(5) If the Commission finds that the applicant does not fulfil all the
requirements of these Rules or any additional submission is
required, it may, within 25 (twenty five) days of receipt of the
application, direct the applicant to fulfil the requirements within
such time as the Commission may determine, and the
Commission may accord registration, as prayed for, within 30
(thirty) days of such fulfilment.
(6) If the Commission finds that the applicant does not fulfil all the
requirements of these Rules or where a direction to fulfil such
requirements was given under rule 9(5) and the applicant fails to
fulfil such requirements, the Commission may reject the
application, stating the reasons thereof.
(7) If the Commission decides to award registration to the fund, the
fund manager shall pay, within 15 (fifteen) days of such decision,
registration fee @ 0.1% of the fund corpus only through a bank
draft or payment order issued in favour of the Bangladesh
Securities and Exchange Commission.
4630 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015
10. Conditions of certificate.
(1) The registration certificate granted under these Rules shall,
inter-alia, be subject to the following conditions:-
(a) the alternative investment fund shall abide by the
provisions of these Rules and other applicable laws;
(b) the fund shall not carry on any other activity other than
its permitted activities;
(c) the fund shall forthwith inform the Commission in
writing, if any information or particulars previously
submitted to the Commission are found to be false or
misleading in any material particular or if there is any
material change in the information already submitted.
(2) An alternative investment fund which has been granted
registration for a particular category of investment, cannot
change its category subsequent to registration.
(3) A fund shall collect commitments from the investors up-to a
period of 03 (three) years from the date of its registration and
declare the final fund size, which shall not be increased after the
said period.
(4) A fund shall collect 5% of the committed amount from the
investors at the time of commitment which may be forfeited by
the fund if the committed amount is not paid-up by any investor
upon call.
(5) A fund shall realize and invest at least 50% (fifty percent) of the
fund corpus within a period of 05 (five) years from the date of
registration, in the event of failure to which, the fund manager
shall refund the amounts realized from the investors within
06 (six) months of expiry of the said period along with such
interests as disclosed in the constitutive documents.
11. Annual fee.
(1) The fund registered under these Rules shall pay an annual fee
@ of 0.05% of NAV of the fund to the Commission through a
bank draft or payment order issued in favour of the
Bangladesh Securities and Exchange Commission within
01(one) month of end of each financial year.
(2) If any fund manager fails to pay the annual fee within the
stipulated time, it shall be liable to pay, from the fund
manager’s own account, penalty of Tk. 50,000.00 (taka fifty
thousand) only for each month of default or part thereof.
 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015 4631
12. Cancellation of registration of a fund.- The Commission, if thinks fit,
may cancel the registration of a fund after informing the Trustee and
providing the fund manager and the Trustee an opportunity of being
heard if :
(1) the Commission determines that such action is necessary in the
interest of the unit holders;
(2) the unit holders , through a special resolution, request the Commission
on reasonable grounds to cancel the registration of the fund; or
(3) the Trustee satisfies the Commission, on reasonable grounds that
continuation of the fund may be detrimental to the interest of its
unit holders .
13. Effect of cancellation of registration of a fund.-
(1) Where the Commission decides to cancel the registration of a
fund, the Commission shall instruct the Trustee to proceed for
winding-up of the fund in terms of these Rules.
(2) The liquidation of assets and distribution of the fund upon
revocation of the trust shall be made by the Trustee in
accordance with the winding-up procedure.
(3) The trust shall stand extinguished after disposal of all assets and
distribution of proceeds to the unit holders.

CHAPTER IV
TRUSTEE

14. Registration of the Trustee.(1) The Trustee of an alternative

investment fund shall be registered by the Commission under these Rules
and no person shall act as Trustee to a fund without such registration.
(2) The Trustee shall apply for registration to the Commission as
per Schedule ‘E’ along with required information and documents
and application fee of Tk. 10,000.00 (taka ten thousand) only.
(3) The Trustee shall have the following eligibility criteria to apply
for registration, namely :
(a) be a bank as defined in the e¨vsK †Kv¤úvwb AvBb, 1991 (1991
m‡bi 14 b¤^i AvBb) or a financial institution as defined in the
Avw_©K cÖwZôvb AvBb, 1993 (1993 m‡bi 27 b¤^i AvBb) or an
insurance company as defined in the exgv AvBb, 2010 (2010
m•bi 13 bs AvBb);
(b) has minimum paid up capital of Tk.50,00,00,000.00 (taka five
hundred million);
(c) has adequate manpower and logistic support to discharge its
duties as a Trustee;
4632 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015
(d) has appointed a compliance officer for the trust having a
minimum of five years service experience in the financial market;
(e) neither the Trustee, nor any of its affiliates or directors have
any relation with the fund manager;
(f) neither the Trustee, nor any of its directors is a loan defaulter;
(g) do not act as arranger or advisor of the fund nor pursue any
investor to or not to invest; and
(h) has no track record of default, negligence or non-compliance
with any of the securities laws for discharging its duties, if it
is in any way connected with the securities market.
(4) On receipt of the application under sub-rule (2), the Commission
shall examine it, and if satisfied that all the requirements of these
Rules are fulfilled, the Commission may accord registration to
the Trustee as per Schedule ‘F’ to act as Trustee to the fund, as
sought for, within 30 (thirty) days of receipt of the application.
(5) If the Commission finds that the applicant does not fulfil all the
requirements of these Rules or any additional submission is
required, it may, within 25 (twenty five) days of receipt of the
application, direct the applicant to fulfil the requirements within
such time as the Commission may determine, and the
Commission may accord registration, as prayed for, within 30
(thirty) days of such fulfilment.
(6) If the Commission finds that the applicant does not fulfil all the
requirements of these Rules, or where a direction to fulfil certain
requirements was given under sub-rule (5) and the applicant fails
to fulfil such requirements, the Commission may reject the
application, stating the reasons thereof.
(7) If the Commission decides to award registration to the Trustee, it
shall pay, within fifteen days of such decision, registration fee of
Tk.25,000.00 (taka twenty five thousand) only through a bank
draft or payment order issued in favour of the Bangladesh
Securities and Exchange Commission.

15. Duties and responsibilities of the Trustee.

(1) The Trustee shall have to perform the following duties and
responsibilities in addition to those described in the trust deed
concerned, namely :
(a) shall act on behalf and for the exclusive interest of the
investors;
(b) shall ensure compliance of all the requirements of these
Rules;
 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015 4633
(c) shall issue units to the investors upon receiving full
payment against such units;
(d) shall ensure that the issuance of units is carried out in
accordance with the provisions of these Rules, the
constitutive documents and any directions, guidelines or
orders if issued by the Commission;
(e) shall maintain the register of unit holders ;
(f) shall preserve the trust deed in its office for observation
of the investors;
(g) shall call the unit holders’ meeting and enforce the
decisions thereof;
(h) shall take adequate steps to redress grievances of the
investors within one month from the date of receipt of any
complaint and shall keep the Commission informed about
the number, nature and other particulars of the
complaints received and the manner in which such
complaints have been redressed;
(i) shall sue or to be sued on behalf of the unit holders;
(j) shall exercise due diligence and vigilance in carrying
out its functions and duties under the constitutive
documents, these Rules and all other applicable laws;
(k) shall ensure that the title to all assets of the fund is
lawfully vested in the trust;
(l) shall hold the assets of the fund in its custody on behalf of
the unit holders in accordance with the provisions of the
constitutive documents, these Rules and all other
applicable laws;
(m) shall not delegate any of its duties;
(n) shall not legally or beneficially own units of the fund;
(o) shall receive payments from eligible investors for
subscription of units and deposit the money received by
the fund in a scheduled bank account maintained entirely
for this purpose;
(p) shall appoint auditors of the Fund upon its establishment
or in the event of any vacancy:
provided that the auditors so appointed shall be from
amongst the list of auditors approved by the Commission
and shall not be the auditors of the fund manager or the
Trustee and shall not be appointed for more than 03
(three) consecutive years;
4634 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015
(q) shall appoint an independent valuer for valuation of the
fund’s investment;
(r) shall appoint a Shariah council for an Islamic fund;
(s) shall monitor the activities of the fund manager in
respect of investments out of the investible fund in
accordance with the constitutive documents, these Rules
or any other applicable law;
(t) shall approve an investment committee for the fund
upon recommendation of the fund manager;
(u) shall form an advisory committee for the fund from
amongst the unit holders and hold meeting of the
committee at a reasonable interval;
(v) shall submit quarterly reports to the Commission on the
following matters:
i. information on investments and investee companies;
ii. information of income and expenses of the fund and
returns paid to investors;
iii. information of lock-in;
iv. information and status of complaints lodged by the
unit holders ; and
v. any other information as the Commission may
require from time to time.
(w) shall authorize the fund manager including signatories to
open bank accounts, BO accounts and securities trading
accounts in the name of the fund;
(x) shall approve person(s) of fund manager to represent in
the board of directors of portfolio companies upon
recommendation of the fund manager; and
(y) shall immediately inform the Commission regarding any
action of the fund manager that contravenes any
provision of the constitutive documents, these Rules or
any other applicable laws.
(2) the trust deed or appointment of the Trustee cannot be varied
or modified without prior approval of the Commission.
(3) the Trustee shall enter into an investment management
agreement with the fund manager.
(4) The Trustee shall be entitled to an annual Trustee fee of
maximum 0.25% of the realized fund.
 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015 4635
16. Cancellation of registration of the Trustee and appointment of a new
Trustee.
(1) The Commission may, considering the appeal of at least 2/3rd
(two-third) majority of the unit holders by value of their
investment in the fund or in the event of negligence of duties of
the Trustee or in the public interest, if it thinks fit, cancel
registration of the Trustee and replace the Trustee by a new
Trustee:
provided that before cancellation of registration, the Trustee
shall be given an opportunity of being heard.
(2) A Trustee can resign with prior approval of the Commission
which shall not be effective until appointment of a new Trustee
and handing over charges by the resigning Trustee.
(3) A Trustee shall cease to exist as Trustee of a fund upon full and
final redemption of all the units at end of operational life of the
fund.
(4) To replace the Trustee, the unit holders shall appoint a new
Trustee by a resolution passed by all unit holders as per the
Trust Act, 1882 and submit for approval of the Commission.
(5) The new Trustee shall meet the qualification requirements of
these Rules and get registration from the Commission.
(6) The Trustee who is replaced shall handover its charges to the
new Trustee after it gets registration from the Commission and
up to that period the existing Trustee shall carry on its
responsibilities as Trustee to the fund.

CHAPTER V
INVESTMENT CONDITIONS AND RESTRICTIONS

17. Investment in a fund.The fund manager may raise capital for a fund
from eligible investors through issuance of units in accordance with
the following conditions :
(1) the funds shall be raised from eligible investors only whether
resident or non-resident Bangladeshi or foreign by way of
issuance of units upon realization of the subscription;
(2) the proposed fund corpus shall be disclosed in the constitutive
documents;
(3) the minimum subscription to the units of a fund shall be
Tk.50,00,000.00 (taka five million) by each investor;
4636 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015
(4) only the eligible investors shall be approached to subscribe to
the fund;
(5) the offer shall be made through a placement memorandum to
subscribe through private placement only; no public offer shall
be allowed;
(6) every eligible investor shall be provided with copies of the
placement memorandum and other constitutive documents; and
(7) no alternative investment fund shall be subscribed by more
than 200 (two hundred) investors.

18. Investment conditions and restrictions.All investments from the

investible fund shall be made subject to the following conditions :
(1) the fund manager shall make such investments which are in
conformity with the investment and fund management guidelines;
(2) the investible fund shall not be invested with a connected person
of the fund manager or the Trustee;

(3) Investment parameters :

(a) at least 75% (seventy five percent) of the fund corpus shall be
invested in non-listed securities of portfolio companies:
provided that, in case of delay of such investment, the
unused portion of realized fund may be invested in money
market instruments up-to a period of maximum 01 (one) year;
(b) maximum 25% (twenty five percent) of the fund corpus may
be invested in listed securities and units of alternative
investment funds managed by other fund managers, of
which maximum 10% (ten percent) of the fund corpus may be
invested in money market instruments:
provided that, investment in a single listed securities shall
not exceed 5% (five percent) of the fund corpus;
(c) no alternative investment fund shall invest more than 25%
(twenty five percent) of the fund corpus in a single non-listed
portfolio company;
(d) The above investment restrictions shall not be applicable in
case of buyouts by a private equity fund;

(4) investment of an alternative investment fund in non-listed

portfolio companies shall be made only in equity and equity
linked instruments but shall not invest in pure debt securities
nor provide any loan;
 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015 4637
(5) no alternative investment fund shall borrow funds directly or
indirectly and engage in leverage activities;
(6) in case of an Islamic fund, the activities of the investees must be
Shariah compliant. In determining the Shariah compliance
status of the investee and investments, the fund manager shall
disclose the Shariah screening methodology prepared by the
Shariah Council in the constitutive documents;
(7) investment by an Islamic fund shall be made only in the
securities/companies classified as Shariah compliant as per the
screening methodology and declared as Shariah compliant by
the Shariah Council.

19. Prohibition on listing.

(1) The units of a fund shall not be listed on any Exchange.
(2) A non-listed portfolio company in which any alternative
investment fund invests shall not apply for listing with any
exchange within 02(two) years from the date of last investment
made in it by an alternative investment fund.
20. Life of the fund.(1) A fund shall be established for a specific period
from 05(five) to 15 (fifteen) years which shall be disclosed in the
constitutive documents.
(2) If allowed by the constitutive documents, the life of the fund may
be extended for a period of up to 02 (two) years beyond its
disclosed life subject to approval of at least 2/3rd (two-third)
majority of the unit holders by value of their investment in the
fund, in a general meeting to be held at least 6 (six) months before
maturity of the fund and thereafter approval of the Commission.

CHAPTER VI
MISCELLANEOUS

21. Enquiry and inspection.

(1) The Commission may, on its own motion or upon receipt of any
information or complaint, appoint one or more persons as
enquiry or inspection authority to undertake enquiry on any
matter or inspection of the books of account, records and
documents relating to an alternative investment fund, the fund
manager, the Trustee or any other person for any of the
following reasons, namely : 
(a) to ensure that the books of accounts, records and
documents are being maintained in the manner specified
in these Rules;
4638 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015
(b) to enquire or inspect complaints received from unit
holders, investors or any other person, on any matter
having a bearing on the activities of the alternative
investment fund or any other person related to it;
(c) to ascertain whether the provisions of the Act, the Ordinance
and these Rules are being complied with by the alternative
investment fund, the fund manager and the Trustee;
(d) to enquire or inspect the affairs of an alternative
investment fund, the fund manager and the Trustee in the
interest of the securities market or the investors.
(2) The enquiry or inspection shall be made in accordance with the
relevant provisions of the Act.
22. Contravention.If any alternative investment fund, fund manager or
Trustee or any other person violates any of the provisions of these
Rules, the Act or the Ordinance or furnishes false, incorrect or misleading
information or suppresses any information, the Commission may take
appropriate actions under the evsjv•`k wmwKDwiwUR A¨vÜ G¸•PÅ
Kwgkb AvBb, 1993 (1993 m•bi 15 bs AvBb) or the Securities and
Exchange Ordinance, 1969.

23. Power to call for information and documents.

(1) The Commission may at any time call for any information and
documents from an alternative investment fund or fund manager or
sponsor or Trustee or unit holders with respect to any matter relating
to the fund or for the assessment of risk or prevention of fraud.
(2) Where information and documents are called for under sub-rule (1)
it shall be furnished within the time specified by the Commission.

24. Submission of reports to the Commission.The Commission may at

any time call upon the alternative investment fund, the fund manager
or the Trustee to file such reports, as the Commission may think fit,
with respect to the activities of the alternative investment fund and the
concerned person shall submit such reports as called upon.

25. Allowable expenses.

(1) The fund manager is entitled to charge the following expenses
to the fund:
(a) Expenses relating to formation and floatation of the fund;
(b) Fees payable to the Commission;
(c) Trustee fee;
(d) Fund management fee;
 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015 4639
(e) Auditors’ fee;
(f) Valuers’ fee; and
(g) Other fees related to the fund.
(2) The expenses charged shall be approved by the Trustee and
clearly disclosed in the constitutive documents and annual
reports of the fund with head wise break-up.

26. Winding up of the fund.

(1) Conditions of winding up: An alternative investment fund
formed as a trust shall be wound up:
(a) when the tenure of the fund as mentioned in the constitutive
documents comes to an end; or
(b) in the opinion of the Trustee, winding up of the fund is
necessary in the interests of the unit holders; or
(c) if 66% (sixty six percent) of the unit holders by value of their
investment in the fund pass a resolution at a meeting that the
fund be wound up; or
(d) if the Commission so directs in the interests of the investors; or
(e) by order of a competent court.
(2) Intimation and notice:
(a) the Trustee of the alternative investment fund shall inform
the Commission of the circumstances leading to the
winding up of the fund as soon as those arise;

(b) the Commission shall examine the information and if thinks

appropriate, instruct the Trustee to proceed for winding-up;
(c) the Trustee and fund manager shall separately send
notices intimating investors of the circumstances leading
to the winding up of the fund and publish the same in at
least one Bangla and one English newspaper.
(3) Consequences of the notice: On and from the date of
publication of the notice under sub-rule (2),
(a) no further investments shall be made out of the alternative
investment fund;
(b) no business activities of the fund shall be carried out;
(c) no further fund shall be raised;
(d) no further units shall be issued; and
(e) no payment shall be made.
4640 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015
(4) Process of winding up :

(a) within 30 (thirty) days from the date of publication of notice

under sub-rule (2), the Trustee shall hold a meeting of unit
holders where authorization of 75% (seventy five percent) of
the investors present by value of their investment in the fund
shall be required to empower the Trustee to take necessary
actions for winding up:

provided that in the events mentioned in sub-rule (a), (c), (d) or

(e) of rule 26(1), the said meeting shall not be required;

(b) the Trustee, if empowered under sub-rule (a), shall proceed for
liquidation of the assets of the fund in the best interest of the
unit holders, and the proceeds accruing to the unit holders
shall be distributed to them in proportion to their respective
interest in the assets of the fund as on the date when the
decision for winding up was taken, through bank drafts or
payment orders, after satisfying all liabilities due under the
fund and making appropriate provisions for meeting the
expenses in respect of the winding up.

(5) Reporting regarding winding up:

(a) within thirty days from the completion of the winding up, the
Trustee shall forward to the Commission and the unit holders,
a report on the winding up certified by the auditors of the fund
containing particulars such as circumstances leading to the
winding up, the steps taken for liquidations of assets of the
fund, expenses of winding up, net assets available for
distribution to the unit holders, payments made to the unit
holders etc.;

(b) upon receiving the report under sub-rule (a), the Commission
shall, if satisfies that all the procedures have been observed
appropriately, cancels the registration of the fund.

27. Clarification, instructions.

(1) The Commission may provide clarifications of any provision of

these Rules in case of arising any confusion; and

(2) The Commission may issue instructions and guidelines under

these Rules.
 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015 4641
SCHEDULEA
[ See Rule 3(2) ]
Application for Registration of a Fund Manager
A. Information to be furnished :
(1) Name:

(2) Addresses of the registered office and corporate head office

with telephone number(s), fax number(s), e-mail address:

(3) Name, designation, telephone and cell phone numbers and e-mail
address of the contact person(s):
(4) Legal status of the fund manager (whether company/statutory
body):

(5) Date and place of incorporation/ establishment and date of

commencement of business, which applicable:

(6) Short description of business:

(7) Other business activities of the fund manager:
(8) Capital and shareholding structure:
(9) Net worth as per latest audited financial statements:
(10) Names and addresses of the fund manager’s auditors:
(11) Loan status of the fund manager and its directors:
(12) Whether fund manager or any of its directors has any relation
with the capital market, if any, details:
(13) Name, educational qualification and experience of the CEO and
compliance officer:
(14) Name, experience, educational qualification and profession of
the directors of the fund manager:
(15) Name and experience of other key executives of the fund
manager:
(16) Organizational structure:
(17) Description of necessary infrastructure for rendering fund
management services:
(18) Names and addresses of subsidiary or associate companies of
the fund manager, if any:
(19) Brief description of funds already managed or formed by the
fund manager with present status, if any:
4642 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015
B. Documents to be submitted:
(1) Memorandum and Articles of Association or such other constitutive
documents;
(2) Certificate of Incorporation;
(3) Certificate of Commencement of Business, if applicable;
(4) Audited financial statements for the latest accounting year;
(5) Board resolution deciding to work as a fund manager;
(6) Bankers’ certificate and bank statements evidencing share money
deposited against paid-up capital;
(7) Organizational structure;
(8) Brief profile of CEO, compliance officer and other key executives;
(9) Office layout; and
(10) CIB Undertakings of the fund manager and its directors.

For and on behalf of the fund manager

(Name, signature with date and stamp of the applicant)

SCHEDULEB
[ See Rule 9(2) ]

Application for registration of an Alternative Investment Fund

A. Information to be furnished:
(1) Name of the fund:
(2) Type of the fund (whether private equity/venture capital/Impact
fund and General/Islamic):
(3) Size and tenure of the fund:
(4) Name and brief description of the sponsor(s) along with amount
and percentage of contribution to be made by each of them:
(5) Name of the fund manager with registration number & date:
(6) Name of the Trustee with registration number & date:
(7) Name of the auditors;
(8) Description of Shariah council, in case of Islamic funds;
(9) Name of the Valuer:
(10) Names of the prospective investors, if any:
(11) Names of the prospective investees, if any:
(12) Names of the sectors/industries where the fund intends to
invest:
 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015 4643
B. Documents to be submitted:
(1) Structure of the fund;
(2) Draft Placement Memorandum;
(3) Draft Trust Deed;
(4) Draft Subscription Agreement;
(5) Draft Investment Management Agreement;
(6) Due Diligence Certificate of the fund manager (as per Schedule ‘G’);
(7) Due Diligence Certificate of the Trustee (as per Schedule ‘H’);
(8) Copies of appointment letter and registration certificate of the Trustee;
(9) Copies of appointment letter and registration certificate of the fund
manager;
(10) Brief profile of members of the key investment team of the fund manager;
(11) Brief profile of members of the investment committee for the fund;
(12) Brief description of the Shariah council, if applicable;
(13) Draft valuation methodology; and
(14) Draft Investment and Fund Management Guidelines.

(Name, signature with date and (Name, signature with date

stamp of the Fund manager) and stamp of the Trustee)

SCHEDULE — C
[ See Rule 2(27) ]
Format and contents of the Placement Memorandum
(Notice:This is not an exhaustive list. The fund manager is obliged to
disclose any other information that may be necessary to enable the eligible
investors to make informed decision.)
A. Material Information:
(1) In addition to the information specifically required by these rules,
the placement memorandum shall contain all material information
necessary to enable the investors to make an informed assessment
of the fund, the investment, the fund manager, the Trustee, the
units being offered, the rights and obligations of the unit holders,
the fund manager, the Trustee and all other parties attaching to
the fund.
(2) The Commission may require disclosure of additional information in
the placement memorandum as it considers appropriate for a
particular fund, which shall be complied with.
(3) If the Commission requires such discloser, it shall inform the fund
manager of the additional information in writing.
4644 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015
B. Information to be included in the Placement Memorandum 

(1) Cover Page of the placement memorandum: On the cover page of

the placement memorandum, the following information shall be
furnished, namely :
(a) Name and address of the fund manager:
(b) Name and address of the Trustee:
(c) Issue date of the placement memorandum:
(d) The following statement: “If you have any query about this
document, you may consult the fund manager and the Trustee”:
(e) The following statement in bold type:

“APPROVAL OF THE BANGLADESH SECURITIES AND

EXCHANGE COMMISSION HAS BEEN OBTAINED TO THE
OFFER OF UNITS OF THIS FUND UNDER THE BANGLADESH
SECURITIES AND EXCHANGE COMMISSION (ALTERNATIVE
INVESTMENT) RULES, 2015. IT MUST BE DISTINCTLY
UNDERSTOOD THAT IN GIVING THIS APPROVAL THE
COMMISSION DOES NOT TAKE ANY RESPONSIBILITY FOR
THE CORRECTNESS OF ANY OF THE INFORMATION AND
STATEMENTS MADE OR OPINION EXPRESSED IN THE
PLACEMENT MEMORANDUM AND OTHER CONSTITUTIVE
DOCUMENTS. SUCH RESPONSIBILITY LIES WITH THE
FUND MANAGER, ITS DIRECTORS AND OFFICERS, AND
THE TRUSTEE. THIS PLACEMENT MEMORANDUM IS
APPROVED TO OFFER THE UNITS ONLY THROUGH
PRIVATE PLACEMENT TO THE ELIGIBLE INVESTORS WHO
ARE ELIGIBLE AND COMPETENT TO UNDERSTAND THE
RISK & RETURN POTENTIALS TO INVEST AND COMMIT
CAPITAL TO THE FUND AND NOT TO MAKE ANY PUBLIC
OFFER. THIS APPROVAL DOES NOT MAKE ANY GUARANTEE
FOR THE POTENTIAL PUBLIC ISSUE OR LISTING OF THE
PORTFOLIO COMPANIES NOR THE FINANCIAL SOUNDNESS
AND PROSPECTIVE RETURNS FROM THOSE. INVESTORS
ARE ADVISED TO MAKE THEIR OWN ANALYSIS REGARDING
THE INVESTMENT BEFORE MAKING THE INVESTMENT
DECISION."

(f) A statement that the fund manager accepts the responsibility

for the accurateness and correctness of information contained
in the placement memorandum at the date of publication.
 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015 4645
(2) Table of contents.
(3) Report to the unit holders.
(4) Due diligence certificates.
(5) Risk factors and the fund manager’s perception about all risks
likely to arise in respect of the fund, the Investments,
management of the fund, portfolio companies and sectors
thereof, business environments, national and international
policies and all other related factors are to be clearly disclosed.
(6) Details of the fund manager.
(7) Details of the investment committee.
(8) Details of the Trustee.
(9) Description of Valuer to the fund.
(10) Description of Shariah council, if applicable.
(11) Summary of the material clauses of the trust deed.
(12) Investment opportunities and investment strategy of the fund.
(13) Manner of investment to the units of the fund with terms and
conditions.
(14) Obligations and rights of the Trustee, fund manager and eligible
investors.
(15) Dividend policy and hurdle rate.
(16) Details of fees and charges to be paid by the fund.
(17) Description of Auditors to the fund.
(18) Accounting year of the fund.
(19) Particulars and frequency of the financial reports to be sent to
the unit holders.
(20) An overview of the applicable regulatory and legal framework.
(21) Circumstances and procedure for the revocation of the trust and
mechanism for the distribution of assets of fund, upon the
extinction or revocation of the trust.
(22) Retirement or removal of the Trustee.
(23) Circumstances and procedure for the change of fund manager
upon the request of the unit holders.
(24) Exit procedure of the unit holders.
(25) Meetings of the unit holders.
4646 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015
(26) Complaints and settlement procedure.
(27) Disclosures and declarations required under these Rules.
(28) Details of the utilization of proceeds of the fund.
(29) Features of the fund, namely :
(a) Basic features of the units;
(b) Transferability/Liquidity;
(c) Returns to investors.

(30) Description of the portfolio companies, if ascertained any,

among others including the following :
(a) Capital structure;
(b) Brief financial information;
(c) Business;
(d) Business prospects;
(e) Management;
(f) Profile of Directors/Owners of the portfolio company;
(g) Description of assets and liabilities/financial position;

(31) Details of the sectors/industry where the fund is likely to invest,

among others, the following factors:

(a) SWOT Analysis;

(b) Details of the key industry players;

(c) Entry or exit barriers;

(d) Future potentials of the industry; and

(e) Government support or fiscal policies about the sector/industry.

(32) Modus Operandi of the fund including:

(a) Application procedure;

(b) Issuance of unit certificate.

(33) Any other information that the Commission may specify.

(34) Application form for allotment of units with KYC of the

applicants.

Each page of the draft placement memorandum to be duly signed and

stamped by the chief executive officers of the issuer and the Trustee.
 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015 4647
SCHEDULED
[ See Rule 9(3) ]
Format and contents of the Trust Deed

The Trust Deed must contain inter alia the following clauses:

(1) Date and place of execution:

(2) Name and legal status of the parties concerned:

(3) Objectives of the fund:

(4) Definitions:
(5) Relation between the parties:

(6) Governing Laws:

(7) Registered address of the Trustee:

(8) Commencement and termination of the trust :

(9) Costs involved with the fund and by whom the costs are to be
assumed:
(10) Description of the parties:
(11) Description of the fund:

(12) Modus operandi of the fund:

(13) Rights, duties and obligations of the Trustee:

(14) Rights and obligations of the sponsors:

(15) Rights and obligations of the unit holders:

(16) Accounts and audit thereof:

(17) Valuation policy of the investments:

(18) Retirement of the Trustee and appointment of a new Trustee:

(19) Meetings of unit holders of the fund with power, scope and quorum
of the meetings:

(20) Amendment provisions of the trust deed:

(21) Any other clauses:

Each page of the trust deed to be duly signed and stamped by the authorized
persons of the sponsors and the Trustee.
4648 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015
ScheduleE
[ See Rule 14(2) ]
Application for registration of Trustee to a fund
A. Information to be contained :
(1) Name of the applicant:
(2) Legal status and core business of the applicant:
(3) Registered address and telephone numbers of the applicant:
(4) Name, address and telephone number of the compliance officer
for the fund:
(5) Date of incorporation:
(6) Date of commencement of business:
(7) Authorized capital:
(8) Paid-up capital:
(9) Net worth:

B. Documents to be submitted :
(1) Certified copy of memorandum and articles of association;
(2) Certified copy of certificate of incorporation and certificate of
commencement of business;
(3) Certified copy of particulars of directors;
(4) Certified copy of return of allotment of shares, or annual
summary of share capital;
(5) Copies of licenses for the applicant’s core business;
(6) Latest audited financial statements;
(7) Resolution of the board of directors deciding to act as Trustee to
the fund;
(8) An affidavit containing the declarations of rules 14(3)(e),(g) and
(h);
(9) Description of manpower and logistic support/infrastructure to
discharge its duties as a trustee;
(10) Bio-data of the Chief Executive Officer and Compliance Officer;
(11) CIB undertakings; and
(12) Draft trust deed.
(Name, signature with date and stamp of the Chief Executive Officer)
 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015 4649
ScheduleF
[ See Rule 3(4), 9(4) and 14(4) ]

Certificate of Alternative Investment Fund/Fund Manager/Trustee

In exercise of the powers conferred by section 10 of the evsjv•`k
wmwKDwiwUR A¨vÜ G¸•PÅ Kwgkb AvBb, 1993 (1993 m•bi 15 bs AvBb) read
with rule 3(4)/9(4)/14(4) of the Bangladesh Securities and Exchange
Commission (Alternative Investment) Rules, 2015, the Commission hereby
grants a certificate of registration to____________________, to act as an
Alternative Investment Fund/Fund Manager/Trustee to (name of the fund)
subject to the conditions specified in the Act and the Rules or as may be
imposed hereafter by the Commission.

Category of the Alternative Investment Fund shall be Private

Equity(PE)/Venture Capital(VC)/Impact Fund.

Registration number of the Alternative Investment Fund/Fund

Manager/Trustee is ___________.

For and on behalf of

BANGLADESH SECURITIES AND EXCHANGE COMMISSION

---------------------

Authorized Officer

ScheduleG
[See Schedule B]
Due Diligence Certificate of the Fund Manager
Chairman
Bangladesh Securities and Exchange Commission
Sub : ................. (Name of the proposed fund)
We, the under-noted manager to the above mentioned forthcoming
alternative investment fund, state as follows:
1. We, while act as fund manager to the above mentioned alternative
investment fund, declare and certify that the information provided in
the application, including that provided in the attached sheets and
documents enclosed, is complete and true in all respects;

2. We further certify that we shall inform the Bangladesh Securities and

Exchange Commission immediately of any change in the information
provided in the application and the documents attached with that; and
4650 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015
3. We warrant that we shall comply with and be bound by the Securities
and Exchange Ordinance, 1969, evsjv‡`k wmwKDwiwUR A¨vÛ G·‡PÄ Kwgkb
AvBb, 1993 (1993 m‡bi 15 bs AvBb), †Kv¤úvbx AvBb, 1994 (1994 m‡bi 18 bs
AvBb), the Bangladesh Securities and Exchange Commission (Alternative
Investment Funds) Rules, 2015, and the Rules, guidelines, circulars,
orders and directions that may be issued by the Bangladesh Securities
and Exchange Commission from time to time in this respect.

WE CONFIRM THAT :

a) the draft placement memorandum forwarded to the Commission

is in conformity with the documents, materials and papers
relevant to the fund;

b) all the legal requirements connected with the said fund have been
duly complied with; and

c) the disclosures made in the draft placement memorandum are

true, fair and adequate to enable the investors to make a well
informed decision for investment in the proposed fund.

For the Fund Manager

(Name, signature with date and stamp of the Chief Executive Officer)

ScheduleH
[See Schedule B]

Due Diligence Certificate of the Trustee

Chairman
Bangladesh Securities and Exchange Commission
Sub: ...........(Name of the proposed fund)
We, the under-noted trustee to the above-mentioned forthcoming fund, state
as follows:

1. We, while act as trustee to the above mentioned fund on behalf of the
investors, have examined the draft placement memorandum, legal and
other documents and materials as relevant to our decision; and

2. On the basis of such examination and the discussions with the fund
manager and it’s officers, and other agencies; independent verification
of the statements concerning objects of the fund and the contents of the
documents and other materials furnished by the fund manager :
 evsjv‡`k †M‡RU, AwZwi³, Ryb 22, 2015 4651

WE CONFIRM THAT :

(a) all information and documents as are relevant to the issue have been
received and examined by us and the draft placement memorandum,
draft trust deed and other constitutive documents forwarded to the
Commission have been approved by us;

(b) we have also collected and examined all other documents relating to
the fund;
(c) while examining the above documents, we find that all the
requirements of the Bangladesh Securities and Exchange Commission
(Alternative Investment) Rules, 2015 have been complied with;
(d) we shall act as trustee to the issue as mentioned above as per
provisions of the trust deed to be executed with the sponsors and shall
assume the duties and responsibilities as described in the trust deed
and other constitutive documents;

(e) we shall also abide by the Bangladesh Securities and Exchange

Commission (Alternative Investment) Rules, 2015 and conditions
imposed by the Commission as regards of the fund;

(f) we shall act to our best for the benefit and sole interests of the unit
holders of the fund; and
(g) the above declarations are unequivocal and irrevocable.

For Trustee
(Name, signature with date and stamp of the Chief Executive Officer)

By order of the Bangladesh Securities and Exchange Commission

PROF. DR. M. KHAIRUL HOSSAIN

Chairman.

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†ZRMuvI, XvKv KZ…©K cÖKvwkZ| web site : www.bgpress.gov.bd